'Squeeze on funds to hit defence projects'

The budget squeeze to contain fiscal deficit will impact India's defence research projects in the long-term, a top official said Thursday.

"Any fund squeeze will hurt our long-term research & development growth. Our budget has been consistently decreasing over several years in real purchasing power," scientific advisor to defence minister Avinash Chander told reporters here.

The union finance ministry had capped budget spending by all central ministries to ensure the fiscal deficit did not exceed 4.8 percent of the GDP for fiscal 2013-14 as in 2012-13.

The annual budget of the state-run Defence Research & Development Organisation (DRDO) has remained stagnant at Rs.10,000 crore during the last three years despite inflation and dollar rate going up sharply.

"In the last three fiscal years, our budget has been constant at Rs.10,000 crore per year though the dollar rate has gone up and so input costs due to high inflation. Our effective purchasing power is coming down while salary bill is going up," Chander, who is also chairman of DRDO, said on the margins of a defence event.

Admitting that squeeze on funds was not a healthy sign, he said R&D spend was declining, which prevented investing in next generation radars.

"We need to make sure that R&D funding is not just maintained but enhanced. We may be able to meet present requirement but squeeze will keep us out of next generation products like multi-static radars, which require high investments," Chander said.

Asserting that real growth of indigenous capability would require eight-nine percent of the defence budget marked for R&D as against 5.4 percent currently, he said the organisation had conveyed its concerns at all levels.

"We hope the government will listen to our concerns, as all agree that our organisation needs to be funded better and more. We are looking ahead for a good one next year," he said at the ninth International Radar Symposium India (IRSI-13).

Squeeze on funds is also affecting new technologies, as the organisation had to give priority to deliver what the armed forces required from the limited resources.

"Unless we are serious about indigenisation, we will continue to import (products) at the cost of technology development," Chander added.